The Legal Principles Governing Upstream Service Contracts in Iran's Oil and Gas Industry
Keywords:
Service contract, oil and gas industry, state sovereignty, return on investment, reservoir conservation, procurement, domestic capacity, environment.Abstract
Upstream service contracts in Iran’s oil and gas industry have been designed as instruments to attract investment and technology without compromising the state’s sovereignty and ownership over natural resources. This article aims to analyze the legal principles governing such contracts by examining key dimensions including state ownership preservation, cost recovery mechanisms, reservoir conservation, project-specific return rates, procurement transparency, domestic capacity utilization, and environmental obligations. The findings indicate that the success and legitimacy of these contracts depend on structural designs that align with national interests, constitutional provisions, macro policies, and principles of international law. Accordingly, reforming the current contractual frameworks with a focus on transparency, contractual justice, environmental responsibility, and domestic participation is a vital necessity for sustainable development in Iran’s oil sector.
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